We all likely figured there would be big changes when the Skydance-Paramount (NASDAQ:PARA) merger kicked in, and they’re wasting no time getting those changes set up. Shareholders, however, proved unhappy with the changes seen so far and sent shares of the media company down fractionally in Thursday afternoon’s trading.
The first major change to arrive today featured how Paramount is allowed to handle its streaming operations. Paramount must now get Skydance’s approval for any joint venture or streaming bundle that involves Paramount+. Therefore, if there were any such deals in the works, they may be on hold, at least for now.
However, Paramount still has time to look for a better deal, though Paramount would have to drop $400 million to the Skydance investor group if it does go elsewhere. Additionally, neither side is allowed to launch “the production, acquisition, or financing of any Property” without the other side’s approval. There are some exceptions, but no one’s sure what they are outside of Skydance and Paramount.
Even the Logo Is Different
In a somewhat darker sign, Paramount’s logo is getting a facelift as a result of the new deal. Reports declare it “the fleece vest of entertainment logos,” with some even comparing it to a range of logos found in finance business circles.
The new logo is a combination of Skydance and Paramount, unsurprisingly, with the mountain-and-stars elements still in place, but the word “Paramount” is now presented in the same font Skydance uses, complete with curved underlining. Some find the logo shockingly lacking in personality but solid enough if “your goal is internal corporate synergy.”
Is Paramount a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on three Buys, six Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 28.32% loss in its share price over the past year, the average PARA price target of $12 per share implies 1.87% upside potential.
